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Friday, March 29, 2024

Economy expanded 6.7% in 2017

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The Philippine economy grew 6.7 percent in 2017, making it the third-fastest growing economy in Asia despite a weaker business process outsourcing industry, the government said Tuesday.

“We are glad to report that the performance of the Philippine economy remains on target, hitting a solid 6.6-percent growth rate in the last quarter of 2017. This stable performance brings our full-year growth in 2017 to 6.7 percent,” Economic Planning Secretary Ernesto Pernia said in a news briefing in Mandaluyong City.

Pernia said the full-year performance was “a strong finish that keeps our position as one of the fastest-growing economies in Asia after China’s 6.9 percent and Vietnam’s 6.8 percent.”

Data from the Philippine Statistics Authority showed that last year’s growth was slower than the 6.9 -percent gross domestic product expansion in 2016, when consumer spending was boosted during elections that propelled President Rodrigo Duterte to power.

Growth in the fourth quarter slowed to 6.6 percent from 7 percent in the third quarter. The business processing outsourcing industry, worth $23 billion and employing 1.15 million people, was a “major contributing factor to this decline,” Pernia said.

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Among the major sectors, industry had the fastest growth at 7.3 percent in the fourth quarter, followed by services at 6.8 percent. The agriculture sector grew 2.4 percent, rebounding from 1.3-percent increase a year ago.

Construction industry in the fourth quarter slowed down to 2.8 percent from 10.7 percent a year ago. The growth was driven by the increase in public construction but was weighed down by decline in private construction.

Pernia attributed the sluggish construction activities in the fourth quarter to “holiday feeling among Filipinos during the period.”

The Philippines’ fourth quarter growth was marginally lower than market expectations, said Sanjay Mathur, chief Southeast Asia and India economist for ANZ Research, adding the trade balance in the last two months of 2017 also deteriorated.

“The prospects for growth in the Philippines remain solid,” Mathur said, citing the passage last month of Duterte’s tax reform program designed to raise funds for infrastructure spending.

Pernia said the government remained confident it would hit its growth target range of 7 percent to 8 percent this year, powered by Duterte’s vow to raise spending on transport, energy and water supply infrastructure. 

Finance Secretary Carlos Dominguez III said he also expected the economy to expand faster this year now that the Duterte administration’s programs to modernize public infrastructure and sustain the growth momentum started falling into place.

Bangko Sentral ng Pilipinas Governor Nestor Espenilla Jr. said the fourth-quarter and the full-year growth confirmed the underlying strength of the economy that rested on increasingly balanced foundation.

“This gives BSP ample policy space to stay focused on meeting its inflation target and pursuing ambitious financial sector reforms,” Espenilla said.

Pernia said the implementation of big-ticket infra projects under the ‘Build, Build, Build’ program would enable the economy for a much higher growth trajectory going forward as these undertakings would create multiplier effects in terms of job creation that would push domestic consumption and spending further.

Pernia said with the country’s projected population of 105.3 million in the fourth quarter of 2017, per capita GDP and per capita GNI grew by 5.1 percent and 4.7 percent, respectively. 

ING Bank Manila senior economist Joey Cuyegkeng said there was a good chance that the fast pace of economic activity since 2012 could be sustained with proper execution of government programs to stimulate the economy. 

“The economic environment engendered by policies of the previous administrations has made it easy for this administration to bring the country to a faster pace of growth,” Cuyegkeng said.

Property consultancy firm Colliers said it was optimistic the country’s growth would remain stable over the near to medium term. “Overall, we expect the local property market to benefit from the government’s commitment to accelerate infrastructure spending,” it said. With AFP

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